Gold and silver prices surge higher, oil recovers off the lows

Gold Technical analysis, overview, strategies, and levels

Gold prices were in for a surge well past yesterday’s 1^st Resistance level that was in line with its conformist buy breakout strategy, as well as breaching the Weekly 1^st Resistance level to keep its long-term technical overview of a bull trend intact. In the FX market, the US dollar was a relative outperformer, but suggested that even with a risk-on move it’s going to be buoyed by further central bank easing running in contrast with the finite supply of precious metals. Tonight's minutes from the Federal (Fed) Open Market Committee combined with Fed speak from its members prior may offer little in terms of future Fed policy direction, though as always we can expect volatility to pick up in both the US dollar as well as risk-related appetite going into the fundamental event.

IG client^* and CoT sentiment for Gold

Retail long traders enticed into taking profit have reduced their majority long bias to a more moderate 59%, well below CoT (Commitment of Traders) speculator bias of 86% as per the latest report.

Gold chart with retail and institutional sentiment

Silver Technical analysis, overview, strategies, and levels

With silver the relative outperformer against gold over the past few days, it continued yesterday despite the US dollar’s outperformance in the FX market, and in turn taking the gold/silver ratio to fresh lows. As seen in the conformist technical strategies, a sell (or buy) should ideally be initiated after a reversal back down (or back up) to avoid getting stuck in a move higher (or lower), especially if volatility persists. Less is needed to shift its technical overview on the daily, while on the weekly it continues to show positive technical bias.

IG client^* and CoT sentiment for Silver

Retail bias is usually little changed in silver holding an extreme long bias as the bulk of those longs have been initiated at higher price levels, but this time around dropped 4% to 89%.

Silver chart with retail and institutional sentiment

Oil WTI Technical analysis, overview, strategies, and levels

Oil prices while in retreat earlier yesterday as the risk-off mood permeated in the financial markets, failed to offer significantly beyond its key pivot points opting to aid contrarian buy reversal strategies instead as its price recovered towards the end of the session. Whether viewing the current overview as a stalling bear trend or volatile in the event of any fundamental updates on the energy front, the split so far has been between breakout vs. reversal strategies. Expect volatility to rise tonight on the release of API's (American Petroleum Institute) oil inventories figure, as well as any update on the geopolitical front with instability in Libya. The energy commodity’s price is now above all its main short-term moving averages (MA) but below all its main long-term MA’s.

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IG client^* and CoT sentiment for Oil WTI

Oil WTI chart with retail and institutional sentiment

*The percentage of IG client accounts with positions in this market that are currently long or short. Calculated to the nearest 1%, as of today morning 8am.

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